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Eric Germa ANN INC. SVP & Chief Procurement Officer November 13, 2012
AberdeenGroup 2012
Session Agenda
ANN INC. Overview Our call to action The new Procurement operating model Our journey to sustainable value Your role in elevating the procurement function
AberdeenGroup 2012
Company Overview
Leading Womens Apparel Retailer $2.2B In Revenue In 2011 2 Brands, 5 Channels of Distribution 981 Stores Across U.S.
AberdeenGroup 2012
AberdeenGroup 2012
AberdeenGroup 2012
Indirect Spend
Store Operations
Organizational Effectiveness
AberdeenGroup 2012
AberdeenGroup 2012
Our Sandbox
Non-Merchandise Spend Merchandise Spend
Non-Merchandise Spend
Information Systems
Marketing
Human Resources
Logistics
Store Supplies
eCommerce
Corporate Services
Facilities Management
Re-negotiate key contracts Address new spend areas through Value Initiative Pipeline (VIP) Lead PMO for all OPEX initiatives
Brand/Division
Business Unit Sponsorship and Stakeholder Buy-in
Leadership Support
Sourcing Team
Process Continuity
Sourcing Team
Sourcing Team
Implementation Team
AberdeenGroup 2012
Implementation Team
Implementation Team
Becoming a Strategic Partner - Implementing a new Procurement Policy to drive early involvement and compliance
No PO, No Pay
Competitive Bidding
No Shadow Procurement
AberdeenGroup 2012
Accelerated Sourcing
4a
Source and Negotiate
5a
Award And Implement
1
Develop Pipeline and Annual Project Plan
6
Implement New Processes
3b
Develop Savings/ReEngineering Hypothesis
4b
Benchmark and Develop Solutions
5b
Final Recommendation and Approvals
RF(x) Grading
AberdeenGroup 2012
AberdeenGroup 2012
Customer-focused Fact-driven, analytical Technology savvy Strong project management A change leader Value-driven Accountable Global mindset Collaborative but assertive, and aggressive Constantly reinvents
AberdeenGroup 2012
Senior Analyst
Identifies issues and independently leverages data sources and market research
Manager
Senior Manager
Director
Develops new insights into issues, efficiently and creatively directs team to develop powerful fact base, leverages analytical tools, and shares market insights
Senior Director
Stretches team perspective, creates faster, broader, deeper insights into issues Drives team to high-quality deliverables and ensures actionable recommendations
Rigorously identifies issues and creatively uses all data sources to develop comprehensive fact-base
Structures comprehensive approach to validate hypotheses, performs complex analyses, synthesizes and presents findings to stakeholders
Independently develops and directs hypotheses, develops solution and work plan while managing stakeholder relationship and requirements
Key Competencies
Coaches team on structuring approaches to complex problems and adjusting strategy as needed
Builds and validates advanced Excel models. Develops wellstructured and compelling Powerpoint presentations tailored to audience
Structures approaches to ill-defined problems Develops clear Challenges conclusions from recommendations and analyses to ensure best quality. feasible implementation plans Sets overall messaging for audience, and reviews Powerpoint presentations Probes and vets team members conclusions from Excel analyses and PPT presentations. Drives stakeholder decisions based on data and compelling logic/communications Helps team toand leverage Sourcing Communication platform to accelerate value Stakeholder Influencing delivery
Leverages additional tools as appropriate (BIQ, TSC, etc.) Is proficient in the 7-step spend Demonstrates expertise in the management process and the 7-step sourcing process and associated deliverables integrates the process into work activities Subject matter expertise in 1-2 basic sourcing categories and strategies SME in 2-4 basic sourcing categories
Trains cross-functional teams on the 7-step spend management process and clearly articulates all deliverables required SME in 1-2 complex sourcing categories and advanced sourcing strategies across several basic categories. Considers alternatives to sourcing-only methodologies (e.g., specs improvement, joint process improvements).
Sells Global Procurement and 7-step spend management process throughout organization. Has proven track record of executing large, complex sourcing programs, delivers sustainable results.
Broadens SME across teams regarding complex sourcing categories and advanced sourcing strategies (e.g., specs improvement, joint process improvements, relationship restructuring, off shoring, demand management, etc.)
Demonstrates intellectual
Prepares accurate spend baseline and negotiated savings forms, detailing underlying assumptions
Reviews spend baseline and negotiated savings forms and obtains required signatures from project sponsors Develops advanced cost models and negotiation strategies
Reviews spend baseline and negotiated savings forms as needed Ensures executive alignment with project results Conducts ongoing follow-up with stakeholders and identifies new projects
AberdeenGroup 2012
Storming
Performing
Ingrained
Stakeholder Partnership Alignment to Strategic Initiatives Spend Analytics PMO Governance Pipeline Management Opportunistic Sourcing Talent Acquisition Complex Sourcing Talent Development Supplier Development Excellence in Role
2009
AberdeenGroup 2012
2010
2011
2012
2013
Results
Exceeded cost savings targets for four consecutive years! Stakeholder satisfaction at all time high! Procurement viewed as a Strategic Partner to the Business!
Requirements
Stakeholder Acceptance is a Must Procurement Leadership must own the result Must Align with the Business Strategy Must Provide Career Growth Opportunities
AberdeenGroup 2012
Actions
Interviews and workshops with over 30 Executive Stakeholders Informal benchmarking and best practice discussions with Procurement Leadership Tailored HR strategy for our people
Aligns with Ann Inc. corporate objectives (multi-channel growth; international expansion; and new store expansion) SRM focuses on total relationship value (advanced capabilities, joint processes, innovation, etc.) not transactional issues SRM positions Ann Inc. for capturing benefits above and beyond traditional Strategic Sourcing
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We estimate Strategic SRM will deliver 40-50% of total benefits within the next 24-36 months!
Engage
Measure
Invest
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Lessons Learned
Keys to a successful Procurement Transformation
Create a vision generate excitement develop a team Secure clear executive support Stay stakeholder-focused price, quality, service, and innovation Understand spend, develop fact-base, excel at analytics Leverage technology Establish team credibility by demonstrating early results Find the best talent to support tomorrows vision, dont delay talent decisions Embrace suppliers' capabilities and collaborate Pick the battles that matterdont underestimate the time it takes to change behaviors Communicate, communicate, communicate Dont wait, create a sense of urgency
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You
Superior
Jerk
Value Creation
Average
Avoider
Politician
Uneven
Great
Stakeholder Management
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Closing Thoughts
What are your next BIG IDEAS? How do you improve stakeholder collaboration? How will you lead next year?
"If you want to build a ship, don't drum up the men to go to the forest to gather wood, saw it, and nail the planks together. Instead, teach them the desire for the sea." Antoine de Saint-Exupery
AberdeenGroup 2012
AberdeenGroup 2012
Thank you
Eric Germa, SVP & Chief Procurement Officer ANN INC. (212) 536-4355 Eric_Germa@anninc.com
AberdeenGroup 2012
AberdeenGroup 2012